'A' Rated insurance - what does this mean for you?

What is a financial rating?

A financial or credit rating is an independent evaluation of an insurer’s ability to meet their financial commitments (most importantly pay claims).


What is the financial rating of the LABC Warranty insurers?

All of the insurers on our panel are ‘A’ rated or better. This means they are considered to have an excellent ability to meet on-going insurance obligations.


What does a financial rating mean to you?

The better the financial rating of an insurer, the more likely they are to be able to meet their financial commitments, such as paying valid claims under your warranty cover. It is particularly important for an insurer to have this financial stability with long-term cover such as warranties, to give you reassurance they will be able to meet their financial obligations over the 10/12 year period of your warranty.


What if an insurer does not have a financial rating?

If an insurer does not have a financial rating, there has not been an independent evaluation of their finances.  As a result, there may be more uncertainty over the ability of the company to meet future claims.

This is why you should be extra careful using lowest cost as a deciding factor when choosing a structural warranty. You should always check who the insurer is, among other considerations.


What happens if an insurer cannot meet claims costs?

If the company is regulated by the FCA then some of the claims costs may be met by the FSCS (Financial Services Compensation Scheme). Depending upon the circumstances, the developer or contractor could also be liable for the valid claim. 


So what is the benefit of placing cover with an insurer with a strong financial rating?

There is more certainty they will be able to meet claims costs, protecting you and your customers. An insurance policy is a promise to pay in the event of a valid claim; this becomes worthless if the company is unable to keep this promise.

You can learn more about our insurers here.

All LABC Warranty schemes are backed by established and reputable ‘A’ rated insurers, but why is the rating of your insurance provider important?

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Please Note: Every care was taken to ensure the information in this article was correct at the time of publication. Any written guidance provided does not replace the reader’s professional judgement and any construction project should comply with the relevant Building Regulations or applicable technical standards. However, for the most up to date LABC Warranty technical guidance please refer to your Risk Management Surveyor and the latest version of the LABC Warranty Technical Manual.

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